Retailers warned over "difficult" new year
This Year is set to be “one of the most difficult times for retailers”. That’s according to Alistair Wesson, the East Midlands regional director at accountant RSM Tenon, who told Insider he expects to witness an increase in the number of retail insolvencies in 2011.
Wesson also predicted that the pressure will fall on the private sector to “dig us out of the hole we are in”, following the economic downturn. He said that the private sector needs “encouragement to facilitate expansion to recruit and grow”.
He said: “I anticipate that the new year could be one of the most difficult times for retailers. While large retailers factor in the rise in VAT to their forecasts and are as prepared as they can, the smaller retailers may not have taken the necessary steps. However, I see that large retailers could also be affected. Few can forget the demise of Woolworths two years ago.
“I envisage we will see an increase in insolvency in retail – and with smaller retailers in particular. It will be very difficult indeed.”
Wesson added that 2011 would be the year in which the full impact of the government cuts would start to filter through.
He said: “I fear that we will continue to see an impact on the construction industry and ancillary industry. It’s similar to the effects of the mining industry years ago. Those companies which will be affected by the difficulties in the construction industry will need to move quickly and change shape in order to survive and withstand the pressure of the ‘ripple effect’.
“As for the banks. In 2011 there will be an increasing pressure on the banks to put money out. We will see a return to ‘old fashioned banking’. Banks say they are lending and are open for business, but in 2011, they will need to fulfil that promise.”
